Govt., India Inc. urge banks to provide cheaper loans

"We are in a situation where all of us have to work together and we have to see to what extent we can bring it (interest rate) down together," Chandrasekhar had said, adding that state-run banks are anticipating a credit growth rate of 24 percent in the current year that would help revive a slowing economy.

Though the government cannot force the banks "to do anything," yet, "all of us have to work together and they (banks) have to see to what extent they can pare interest rates still further," he said.

India Inc. has expressed similar concerns.

According to Venu Srinivasan, president of Confederation of Indian Industry (CII), given the current weakness in real economic data and the decline in inflation, "lending rates should have fallen much faster."

Agrees CII director-general Chandrajit Banerjee. According to Banerjee, the banks need to step up lending, especially in some sectors that are facing a shortage of loans. "The PSU (public sector unit) banks have indicated that they would take a call on the interest rates soon," he said.

Federation of Indian Chambers of Commerce and Industry (FICCI) president Harsh Pati Singhania said lending rates should ideally be in single-digit.